GM' Opel to withdraw from China in 2015

General Motors said over the weekend that it would stop sales of its Opel brand in China from January 2015, and will produce two additional vehicles at its plant in Germany.

The two additional cars will be made in Ruesselsheim, including a Buick model destined for the US, it said over the weekend.

The move forms part of a strategy to intertwine the Opel and Buick product ranges to share development costs, while focusing Opel sales in Europe, and Buick sales in the US and China.

Opel already makes four variants of its Insignia sedan, which shares the same underpinnings as the Buick Regal, at the Ruess-elsheim factory.

"Buick production in Ruesselsheim will further improve our capacity utilization," Opel CEO Karl-Thomas Neumann said in a statement.

Considering Opel does not produce automobiles in China, media reports said the strategy change indicates that Opel withdrawing from the Chinese market and its recovery plan proposed in 2012 has ended in failure in China.

"It would have cost hundreds of millions of euros to raise awareness of the Opel brand and to expand the distribution network," Neumann said.

"Buick, however, is one of the market leaders in China and we plan to intensify our future collaboration, with several projects currently under examination," Neumann added.

Opel, which entered China in 1993, sold only 4,365 cars in China last year, compared with Buick, which sold 810,000 cars.

Opel said it would invest 245 million euros ($337 million) to build a new model at the factory. The investment comes on top of a 4 billion euro investment slated for Germany and Europe to overhaul Opel's ageing product range with 23 new products and 13 new engines.

The auto maker revealed in December that it planned to make a new car, but declined to give further details.